Investor clampdown cooling mortgage growth

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Loans to investors have dropped 0.6% in August, proving that APRA’s restrictions placed on investment lending have well and truly flowed through to the market.

The latest monthly banking figures released by APRA show loans to investors dropped almost $3.5 billion in August. Aggregate year-on-year growth is now just below APRA’s 10% limit at 9.9%, with $48.2 billion investment loans settled over the year.

Two of the four major banks, however, are still growing their investment loan books above 10%. NAB has grown its investment book by $11.1 billion year-on-year, an annual growth rate of 13.5%. ANZ has grown its investment portfolio by $7.7 billion, which equates to an annual growth rate of 10.2%. However, ANZ decreased its exposure to investment lending over August, recording a decline in its investment portfolio of 0.7% compared to July. NAB’s edged up by 0.2% over the month.

Australia’s largest lender to investors, Westpac, saw the largest decrease of the majors in loans to investors over August, recording a 3% decrease in the month. Westpac’s year-on-year growth in its investment portfolio is now almost half of APRA’s limit, at 5.3%.

However, it should be noted that Westpac still holds the biggest slice of the investment market by far, holding $20.6 billion, or 15.7%, more in investment loans than the next biggest lender to investors, CBA.

According to the figures, CBA grew its loan book by $372 million in August, bringing its year-on-year growth just below APRA’s limit at 9.7%.

Macquarie Bank has again recorded the biggest year-on-year growth in its investment book, growing at more than seven times APRA’s limit, at 72%. However, its total investment loan book sits at just $9.2 billion.

AMP, who pulled out of the investment lending market altogether in July, still remains above APRA’s limit, with a year-on-year growth rate of 10.7%. Over August, the non-major’s investment book declined 1.7%.

Loans to owner-occupiers grew 1.8% over August, with aggregate year-on-year growth in the owner-occupied market of 7.5%, with the total book sitting at $843.2 billion.